WHILE the economic recovery has boosted sales among small and medium enterprises (SMEs), these businesses are facing labour shortage, which has become a stumbling block for them to grow and tap rising business opportunities.
In fact, labour shortage is not new to the SME industry, especially in the manufacturing, construction and agriculture sectors, but there has been no clear solution to the woes.
The situation, according to industry players, is getting worse as many Malaysians are not interested to take up jobs in the SME industry.
Says Associated Chinese Chambers of Commerce and Industry Malaysia small and medium enterprises deputy chairman Koong Lin Loong: “Locals perceive the jobs in the SME industry, especially in the manufacturing, construction and agriculture sectors, as ‘3D jobs’ – dirty, dangerous and demeaning, or dirty, dangerous and difficult.”
Although foreign workers can fill up the vacuum in the SME job market, Koong says this is merely a temporary solution. Most of the foreign workers are from Indonesia, Bangladesh, Myanmar, India and Vietnam.
“We need to reduce our dependence on foreign workers. We have to train locals to be skilled workers as it is important to grow the industry with the nation’s asset (its people),” he tells StarBizWeek.
Koong says that ultimately, foreign workers will bring their skills back to their respective countries. He points out that it will be difficult to turn the country into a high income economy if the nation depends on foreign workers.
To solve this issue, he suggests that appropriate courses on skills development to meet the needs of the SME industry be introduced.
He also suggests that the current courses provided by the National Youth Skills Institute be revamped.
“SMEs also need to improve their salary structure to attract more locals and train them with proper skills. Government policies need to be more business friendly to help SMEs to grow,” he says.
SMI Association of Malaysia national president Chua Tiam Wee says the labour shortage is more accute in several areas within the SME industry, particularly the furniture, food and agriculture business.
“Some furniture companies are unable to get workers even though their orders are increasing. This will affect the companies’ performance and slow down expansion plans,” he says.
He says the situation has become even more difficult to address since the Government imposed restrictions on the hiring of foreign workers. He says the association has brought up the issue with the Human Resources Ministry and the International Trade and Industry Ministry (Miti), adding that Miti has helped four sectors in the manufacturing sector to get in workers early this year.
“The Government is concern that foreign workers will lead to social problems but we think that it is the illegal workers that create problems, not those who are brought in legally. We can avoid social problems by providing proper accommodation, amenities and assistance,” he says.
Chua suggests that the Government gradually reduce the number of foreign workers entering the country while providing incentives to SMEs so that they can allocate resources to train Malaysians to take up jobs.
“The Government should also consider extending the retirement age of Malaysians as this can help reduce the labour shortage situation,” he says, pointing out that the retirement age could be raised to 62 or 65 as practised in some developed countries.
Chua says that over the long term, SMEs should reduce their dependence on foreign labour as they could leave any time when they find opportunities in other countries.
“SMEs need to improve their productivity, create value added products and invest in branding as this will help them exit from the low-end manufacturing segment,” he says.
To draw more local talent, he says, SMEs should provide career prospects and incentives, profit-sharing schemes, partnerships or joint-venture opportunities.
